Twitter Takeover: Elon Musk Doesn't Want To Buy Twitter After All

The Tesla boss wants to terminate the agreement. Previously there was a dispute about the number of fake accounts. The stock plummeted. Twitter wants to enforce the deal in court.

Elon Musk's withdrawal has been apparent for weeks. The Tesla boss has now canceled his agreement to buy the short message service Twitter. The platform would have broken several points of the takeover agreement. This emerged from a document released by the US Securities and Exchange Commission on Friday. The founder of the electric car manufacturer Tesla and the richest person in the world announced in April that he wanted to take over Twitter for $44 billion.

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Musk's turnaround does not come as a surprise . His lawyers justified the withdrawal with allegedly insufficient information on the number of fake accounts, the US Securities and Exchange Commission said in a statement. Musk had publicly questioned the Twitter numbers for weeks. Observers interpreted this as an attempt to at least lower the price. However, Twitter does not want to accept Musk's exit from the takeover deal. 

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They want to enforce the sale at the price agreed with Musk and also go to court for it, wrote the head of the board of directors Bret Taylor on Twitter. The Board of Directors is committed to completing the transaction and plans to take further "legal action to enforce the merger agreement," Taylor wrote. He is confident of winning the Delaware Chancery.

Musk has been trying since mid-May to address Twitter's allegedly false estimates of the number of spam and fake accounts. Twitter has been estimating the number of fake accounts at less than five percent for some time. Musk doubted that and therefore declared the takeover deal to be suspended . Musk's lawyers said Twitter had failed to provide Musk and his advisory staff with the data they needed to verify the fake account details for nearly two months. They describe this as such a serious breach of the terms of the contract that the purchase agreement could be terminated.

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But Musk shouldn't be able to withdraw from the deal that easily - there is a risk of a lengthy legal dispute. He and Twitter have agreed to a $1 billion penalty if either party backs out of the deal. If Twitter insists on enforcement, it should still be legally difficult for Musk. The company has repeated several times over the past few weeks that it wants to push through the deal.

Musk is already a major Twitter shareholder with a good nine percent stake, which he bought on the stock exchange before announcing his takeover plans. That, too, caused trouble, as Musk failed to meet the deadline by which exceeding five percent participation must be made public. His entry into Twitter boosted the share price. Musk is therefore accused in an investor lawsuit that the delay saved him a lot of money when buying more shares.

Even before Musk's announcement on Friday, Twitter stock was trading at just $36.81. Experts had speculated that given the price difference, Musk was no longer willing to stick to his original bid. Following the announcement of Musk's planned exit from the deal, the stock fell 7.5 percent to $34.05 in after-hours trading. Musk originally offered shareholders $54.20 per share.

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